Stocks give ground amid unclear signals

NEW YORK » Nervous investors collected profits and sent stocks lower yesterday, wiping out an early advance amid conflicting signals about inflation and consumer spending.

The market pulled back when the Dow Jones industrials reached an eight-month high shortly after midday. Investors have been uneasy for months about inflation and soaring oil prices, and their anxiety was fed by a Labor Department report that energy costs led a jump in wholesale prices last month. Many decided the safest strategy was to sell.

Meanwhile, a better-than-expected monthly retail sales report that might have supported the market was undercut by a weak sales outlook from Target Corp., which also clouded strong results at Home Depot Inc.

Wall Street's retreat also came despite crude oil settling below $57 a barrel for the first time since June 30. A barrel of light crude dropped 71 cents to $56.98 on the New York Mercantile Exchange.

At the close of trading, the Dow lost 10.73, or 0.1 percent, to 10,686.44. During the session, the Dow rose nearly 45 points to reach its highest level since March 15.

Broader stock indicators also gave up their gains. The Standard & Poor's 500 index finished down 4.75, or 0.39 percent, at 1,229.01, and the Nasdaq composite index declined 14.21, or 0.65 percent, to 2,186.74.

Bonds rose, with the yield on the 10-year Treasury note tumbling to 4.56 percent from 4.61 percent late Monday.

It was the specter of higher prices that unnerved Wall Street. The Labor Department's producer price index -- a measure of wholesale prices often seen as a barometer of future inflation -- grew 0.7 percent in October as soaring energy prices drove up manufacturers' costs. Economists were expecting the index to be unchanged last month.

Meanwhile, the Commerce Department said retail sales rose 0.9 percent in October, excluding the effect of a recent slide in auto demand. Economists were looking for a 0.3 percent gain, following a 1.1 percent rise the month before.

Including car sales, retail sales were down 0.1 percent, the Commerce Department said. That reversed a 0.3 percent increase in September but trounced estimates for a 0.7 percent decrease.